Though still in formation, Irish Water is drowning in problems

On August 8, 2013, Irish Water installed its first water meter in Maynooth Co. Kildare marking the start of its three-year nationwide metering program.Photocall Ireland / Bord Gais

As every American tourist knows, it rains a lot in Ireland. That’s why we have 40 shades of green. That’s why we have the most abundant and rich grass in the world and why we produce the best milk and beef.

It never stops raining and we have rivers and lakes all over the country. So we could not have a national water problem, right?

Well, actually, we do. It’s one thing to have lots of rain, it’s quite another to have enough treated water coming out of the taps.

The sad fact is that we have invested so little in water services over the years that supply is now barely keeping up with demand.

The new Irish state did build some facilities in the early years, like the magnificent Poulaphuca Reservoir in the Wicklow mountains near Dublin. But much of our system of water treatment plants and distribution pipes is a legacy from the British (along with our railways, canals, public buildings etc).

It was under British colonial rule that much of the basic building and engineering work that still underpin our economy was carried out.

The old water collection and treatment plants and the pipe systems through our cities and bigger towns were impressive feats of planning and engineering in their day. The trouble is that day was much more than a century ago, and time and rust have corroded the network of old cast iron pipes.

It’s estimated that around 30 to 40 percent of all the treated water in Dublin is lost through leaky pipes. The capacity of the reservoirs and treatment plants that serve the Dublin region are no longer adequate after the explosive economic and population growth we have had in recent years.

So yes, we have a problem, both in the supply of water and the disposal of waste water and sewage.

We’ve been so slow in doing anything about it – we blew away the money during the boom instead of spending it on infrastructure – that the European Union is now on our case insisting that we meet agreed EU water management standards.

So the government has been forced to act, and in 2013 it set up a new national organization called Irish Water. The new commercial semi-state would take over water management from the county councils all over Ireland that have provided the service up to now.

Irish Water was set up as a subsidiary of Bord Gais (the semi-state national gas board organization) so that it could benefit from its experience running a big public utility.

Legislation last year gave Irish Water the power to put water meters at every home in Ireland. That work is now underway and billing for the water we use is due to start next year.

Charging separately for water – which up to now has been paid for out of general tax revenue – is in line with EU policy to reduce waste and, in theory, to provide the funds in future to upgrade our water supply system.

That’s the soggy background. But you will be more familiar with the public outrage that has erupted in the past month when it was revealed that Irish Water, less than a year in existence, is already flushing vast amounts of taxpayers’ money down the toilet in secret.

If you’ve been following the story in the Irish papers you will have seen some of the details. The headline grabber was the admission that the new semi-state organization, even though it has over 300 staff in a new office block (with its own gym) in the center of Dublin, is spending around €80 million ($108m) of an estimated €180 million ($244m) in set-up costs on outside consultants.

Other points to emerge since then are that:

*Welsh Water, a similar sized new organization in Wales, was set up for around €15 million ($20m).

*The boss of Irish Water, John Tierney, is getting a €200,000 salary (plus expenses), more than his equivalent in Britain with 12 times our population.

*29 staff members are on salaries of over €100,000 ($135,000).

*65 senior staff members will get annual bonuses of an extra 14 percent for meeting targets.

*A car allowance of €10,500 ($14,200) is being paid to 27 senior managers.*The jobs are permanent and pensionable and come with health insurance. What really annoyed people here – already angry at the idea that we should have to pay for water – is that this new quango with over 300 staff seems to be operating as though we are still in the middle of the boom, with big salaries, guaranteed pensions, nice offices, cars and expenses.

And instead of doing the work themselves, they appear to be outsourcing as much as possible to consultants (that way they don’t get stressed and they have somebody to blame if things go wrong).

It’s a classic case of what happens with organizations set up with public money here, which so often turn into feather-bedding quangos costing millions to run and which don’t actually do very much apart from generating red tape and hiring consultants.

The casual spending of tens of millions at a time here when so many people are struggling to survive financially and paying very heavy taxes is hard to swallow, whether you have a glass of Irish water or not.

So, people asked, who are the consultants and what will they be doing? It turns out that four or five big companies are getting most of the gravy.

One of them is the accountancy firm Ernst & Young, which was auditing the books at Anglo Irish Bank (the bank that brought down the country) and failed to see there was anything wrong!

IBM Consulting is getting €45 million ($61m) for planning systems like the new utility’s call center, customer care and billing. Another global consulting company, Accenture, is getting €17 million ($23m) for various services, including IT.

What they are doing is dressed up in corporate speak and gobbledygook designed to make it sound incredibly complicated.

But it’s not. Irish Water is just another utility, like Electric Ireland or the Gas Board or Eircom (the national phone company).

All these already have billing systems and customer services that deal with every home in the country. So why do we need all these consultants reinventing the wheel when the expertise is already there? Wasn’t that why the Irish Water set-up was linked to the Gas Board?

It turns out that the Irish Water boss has earlier form in dealing with consultants. John Tierney is a previous Dublin City manager, and it was on his watch that all those consultants were hired for the incinerator project in the Docklands area. That was supposed to handle all of Dublin’s waste and generate cheap electricity.

But project was never started and nearly 10 years later it is moribund – but it has cost the taxpayer over €100 million ($135m), a lot of which went to, you’ve guessed it, consultants.

Another interesting thing about Irish Water is that more than 100 of the 300 staff are people who left local council authorities to join the new organization. Some of these would have taken early retirement, so they now have nice salaries as well as their state paid council pensions.

An example is the former Waterford County manager who retired from the council at the end of 2011 with a pension package worth €335,000 ($450,000). Now he’s back in the game with Irish Water.

With all this going on, is it any wonder ordinary people here in the private sector who start paying tax at 52 percent at a very modest income level are deeply cynical about how public money is spent in Ireland? And at the lack of accountability and the secrecy?

Irish Water is yet another state organization that has been excluded from the Freedom of Information Act, making it hard for the media to examine what it’s doing.

One thing is clear, however. Some people are going to do very well out of Irish Water. But it won’t be the vast majority of people.

Around €180 million is being spent on setting up Irish Water, including the €80 million going to consultants. And it’s costing around a billion euro to install the water meters all over the country.

That’s a lot of money. Just think what it could have done to repair the pipework in Dublin.

All that money is being spent — but not a single euro of it is going on the pipes!